Will the CPUC reject illegal cost shifts onto millions of Californians served by Community Choice Energy programs?
More than 160 cities and counties throughout California have chosen to participate in community choice aggregation (CCA) over the last eight years. There are 19 CCA programs operating successfully across California — from Humboldt County to Los Angeles, Placer County to Monterey Bay. Community choice is proving to be a powerful force in driving greenhouse gas emissions reductions, keeping energy costs down, providing transparency and accountability, and investing in innovative programs and projects to meet the needs of millions of Californians in their local communities.
The future of CCA in California hangs in the balance, however, due to proposed reforms to the so-called Power Charge Indifference Adjustment (PCIA) that would illegally shift costs from bundled, investor-owned utility (IOU) customers to CCA customers.
Instead of adopting these reforms, the California Public Utilities Commission (CPUC) should consider a set a common-sense adjustments to the PCIA that will ensure equity and stability as California’s continues to move forward to decarbonize. The CPUC is scheduled to decide on the PCIA reforms on October 11.
A quick introduction to CCAs and the PCIA
Community Choice Aggregators are local governmental agencies buying electricity for their community members in place of investor-owned utilities like PG&E, SCE and SDG&E. The county of Alameda, along with many cities in the county, created East Bay Community Energy (EBCE) to accelerate deployment of GHG-free energy, and to invest in the community EBCE serves.
CCA customers must pay ongoing charges to the IOUs for the unavoidable, above-market costs of power supply commitments entered into by the IOUs while CCA customers were still served by the IOU. The single largest such charge is the PCIA — state law requires it be set in a manner that avoids shifting costs between either CCA or IOU customers.
The PCIA has been controversial. Both CCAs and IOUs claim the current PCIA methodology unfairly shifts costs onto their respective customers. Right now, the CPUC is considering two proposals that would change how the PCIA is calculated.
Unfortunately, the two proposed decisions currently under consideration by the Commission both have fatal methodological flaws that result in significant — and illegal — cost shifts on to CCA customers. Based on PG&E’s own analysis, the “Alternative Proposed Decision” (APD) would result in a greater than 18% increase in the PCIA rate and more than $300 million in cost shifts — and increased bills — onto millions of CCA customers across California, including the hundreds of thousands of CARE customers currently served by CCAs.
Table 1 – Comparison of current PG&E PCIA and APD PCIA
The Commission has an opportunity to make some straightforward changes – based on well understood energy market dynamics — to their PCIA proposals that can fix the key methodological flaws and ensure that the PCIA treats both CCA and utility customers fairly.
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